dreaming vs imagination

dreaming and imagination both are nouns.

Word	Noun	Adjective	Verb	Adverb
dreaming	Yes	No	No	No
imagination	Yes	No	No	No

As nouns, imagination is a hypernym of dreaming; that is, imagination is a word with a broader meaning than dreaming:

Other hypernyms of dreaming include imagery, imaging, mental imagery.

As nouns, imagination is a hypernym of dreaming; that is, imagination is a word with a broader meaning than dreaming:

dreaming: imaginative thoughts indulged in while awake
imagination: the formation of a mental image of something that is not perceived as real and is not present to the senses

Other hypernyms of dreaming include imaginativeness, vision.

dreaming (noun)	imagination (noun)
a series of mental images and emotions occurring during sleep	the formation of a mental image of something that is not perceived as real and is not present to the senses
imaginative thoughts indulged in while awake	the ability to form mental images of things or events
	the ability to deal resourcefully with unusual problems